Apple loses top spot in China's smartphone market to Vivo
What's the story
Apple has been dethroned as the leading smartphone seller in China, with Vivo and Huawei taking the lead.
The Cupertino-based company's annual shipments in China fell by 17% in 2024, according to data from research firm Canalys.
The decline marked the company's largest-ever annual sales drop in the country and led to a 4% decrease in its shares on Thursday.
Market dynamics
Vivo and Huawei outperform Apple in market share
In 2024, Vivo captured a 17% market share while Huawei closely followed with 16%.
Apple lagged behind the two homegrown manufacturers with a 15% share.
The absence of artificial intelligence features in the latest iPhones sold in China, where ChatGPT is unavailable, has been attributed to this decline in market share.
Market challenges
Analyst highlights challenges for Apple's premium market position
Canalys analyst Toby Zhu described this as Apple's worst annual performance in China.
He noted several challenges the company faced, including Huawei's continuous flagship releases and the emergence of domestic foldable phones in high-price segments.
Not to mention, Android brands like Xiaomi and Vivo are building consumer loyalty through technological innovations, making the competition even tougher for Apple.
Market strategies
Huawei rebounds, Apple resorts to discounts
After US sanctions in 2019 restricted its access to American technology, Huawei has made a comeback by introducing new phones with China-made chipsets.
The company witnessed a 24% increase in shipments in the fourth quarter alone.
Apple, on the other hand, had to rely on rare discounts on its iPhone 16 models on its official website and Chinese e-commerce platforms like Alibaba, to boost sales.
Growth leaders
Xiaomi leads growth among top phone makers
According to Canalys data, Xiaomi led the growth among top phone makers with a 29% increase in fourth-quarter shipments.
OPPO and Vivo also recorded gains of 18% and 14%, respectively.
Despite Apple's challenges, overall annual shipments of smartphones in China grew by four percent year-on-year to 285 million units in 2024.